Bills Digest no. 127 2009–10

WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.

The purpose of this Bill is to provide transitional arrangements
for the period
from
1 January 2010 until 31 December 2012 to allow the states and the
Northern Territory to implement mirror legislation that corresponds
to the current Commonwealth Offshore Petroleum (Safety) Regulations
2009 concerning the payment of safety case levies. It will also
enable the Commonwealth to collect levies in the meantime in
relation to designated coastal waters.

Section 8 of the Act imposes a safety case levy in relation to a
facility in designated coastal waters. The term ‘designated
coastal waters’, in relation to a state or the Northern
Territory, has the same meaning in section 3 of the Act as in Part
6.9 of the Offshore Petroleum and Greenhouse Gas Storage Act
2006.[2]
The safety case levies are calculated according to the formula set
out in the Offshore Petroleum and Greenhouse Gas Storage (Safety
Levies) Regulations 2004, which also sets out the
procedures for payment.

In the current Bill, references to the Petroleum (Submerged
Lands) (Management of Safety on Offshore Facilities) Regulations
1996 are replaced by references to the Offshore Petroleum (Safety)
Regulations 2009 (the Safety Regulations 2009). The Safety
Regulations 2009 were tabled on 2 February 2010 and the
disallowance period will end shortly. The regulations commenced on
1 January 2010. The Explanatory Statement comments on the purpose
of the regulations:

The purpose of the Offshore Petroleum (Safety)
Regulations 2009 (the Safety Regulations) is to consolidate and
update the safety-related regulations under the Act into one
legislative instrument. The consolidation incorporates the
Petroleum (Submerged lands) (Management of Safety on Offshore
Facilities) Regulations 1996, the Petroleum (Submerged Lands)
(Occupational Health and Safety) Regulations 1993, and the
Petroleum (Submerged Lands) (Diving Safety) Regulations 2002.
References to the Act are also corrected.

The Safety Regulations are also amended to
allow for offshore pipelines to be regulated as
“facilities” under the safety case regime. This is
consistent with amendments to the Offshore Petroleum and
Greenhouse Gas Storage (Safety Levies) Act 2003 on 8 October
2009, with effect from 1 January 2010, removing provisions relating
to the pipeline safety management plan levy.[3]

The Offshore Petroleum (Safety Levies) Regulations 2004
were amended by the Offshore (Safety Levies) Amendment
Regulations 2009 No.1. The Explanatory Statement comments on
the purpose of the regulations as follows:

The purpose of the amendments to the Offshore
Petroleum (Safety Levies) Regulations 2004 is to remove references
to the pipeline safety management plan levy, to amend the safety
case levy so that it covers pipelines and to extend coverage of
safety levies to future greenhouse gas storage activities. The
amendments also increase the unit value to work out the amount of
safety levy payable. They also update the regulations to refer to
and be consistent with the Principal Act and the Safety Levies
Act.[4]

The Selection of Bills Committee resolved to recommend that the
Bill not be referred to committees.[5]

The Alert Digest of the Senate Standing Committee for the
Scrutiny of Bills drew attention to the retrospective provisions in
items 2, 5 and 6 of Schedule 1 of
the Bill. The Committee commented that it generally draws attention
to any Bill where retrospective application of provisions is
included and makes comment on whether it adversely impacts on
people or not. The Committee quoted a passage from the Explanatory
Memorandum for the Bill as follows:

While the Amendment Act provided transitional
arrangements it did so on the basis that State and Territory
regulations which correspond to the Commonwealth regulations would
be similarly amended. This has not yet occurred which means that
some safety levy payments due to the National Offshore Petroleum
Safety Authority may not be collectable until such time as the Act
is amended. Thus a transitional period is required …

The Committee acknowledged this explanation and commented that
it was unaware of any detrimental impacts as a result of the
retrospectivity.[6]

Item 1 amends the definition of
‘safety case in force in relation to a
facility’ in existing subsection 7(8) to omit reference
to the Petroleum (Submerged Lands) (Management of Safety on
Offshore Facilities) Regulations 1996 and insert a reference to the
new Offshore Petroleum (Safety) Regulations 2009 which commenced on
1 January 2010. Among other things, the Safety Regulations repealed
the Petroleum (Submerged Lands) (Management of Safety on Offshore
Facilities) Regulations 1996 (the 1996 Regulations).

Item 2 amends section 8 of the
Act which deals with the imposition of a safety case levy in
designated coastal waters. Proposed subsection
8(7A) is inserted to provide that if during a period
starting 1 January 2010 and ending 31 December 2012, there is a
pipeline safety management plan in force for a pipeline that is a
facility, then the section has effect, with the result that the
safety management plan will be treated as if it were a safety case
in force for that facility.

Proposed subsection 8(7B) provides that if:

a facility located or proposed to be located in designated
coastal waters, and

during the period 1 January 2010 to 31 December 2012, a safety
case is in force for the facility under legislation (within the
meaning of regulations made by the relevant state or the Northern
Territory which mirrors provisions or substantially corresponds
with the 1996 Regulations as immediately in force before 31
December 2009), section 8 then has effect as though a safety case
were in force for that facility at the relevant time. In other
words, the safety case will be treated as being in force under the
Offshore Petroleum (Safety) Regulations 2009.

Item 3 inserts a definition of
‘pipeline safety management plan in force in relation to
a pipeline’ into subsection 8(8) of the Act.
Item 4 amends the definition of ‘safety
case in force in relation to a facility’ in subsection
8(8) to remove a reference to the 1996 Regulations and replace it
with a reference to the Safety Regulations.

Items 5 and 6 provide that the amendments in
items 1 and 4 (being the insertion of the reference to the Safety
Regulations 2009 in place of the 1996 Regulations in the definition
of ‘safety case in force in relation to a facility’ in
subsections 7(8) and 8(8) of the Act) apply in relation to a safety
case in force at the start of a year starting on or after 1 January
2010 (or part of that year).

This Bill enables the Commonwealth to collect safety case levies
even though the states and the Northern Territory have not as yet
passed legislation that corresponds to the changes to the
Commonwealth’s regulations.

Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2784.

[1]. ‘Safety case
levy means levy imposed by section 7 or 8’, Section 3,
Offshore Petroleum and Greenhouse Gas Storage (Safety Levies)
Act 2003; ‘Safety case’ is defined in Regulation
1.5 of the Offshore Petroleum (Safety) Regulations 2009:
‘Safety case means the document known as a safety case that
is submitted to the Safety Authority under Part 2 of Chapter
2.’ NOPSA describes a ‘safety case’ as being
‘a document produced by the operator of a facility which
identifies the hazards and risks, describes how the risks are
controlled, and describes the safety management system in place to
ensure the controls are effectively and consistently applied,
http://www.nopsa.gov.au/safety.asp#case